On Thursday, Republican Presidential candidate Sen. John McCain (R-AZ),  Sens. Trent Lott (R-MS), and John Sununu (R-NH) held a press conference where they called for the current Internet tax ban to be made permanent before it expires on November 1. The ban, which has been in place since 1998, prohibits state and local governments from taxing Internet access, or devising taxes uniquely for the Internet.

McCain pointed out that if the moratorium is not made permanent, Americans can expect the cost of access to increase. He used the example of the telephone industry to make his point. “Keeping Internet access affordable is vitally important to all American consumers.  If Americans want to know what their Internet access bill will look like if the tax moratorium expires, all they need to do is look at a phone bill,” McCain said.  “Taxes and government fees add as much as 20 percent to Americans’ telephone and cell phone bills and we cannot allow that happen to the Internet — likely the most popular invention since the light bulb.”

However, many state governors and Senators who were former governors oppose the permanent ban, because they fear that states will lose a future source of revenue. Currently ten states were grandfathered in to the original bill, called the Internet Tax Freedom Act. Hawaii,New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington & Wisconsin are currently allowed to collect state Internet taxes. These states are worried that if the ban becomes permanent, they would lose $120 million per year.

The legislative alternative being proposed is a four year extension of the current extension called Internet Tax Non Discrimination Act. The proponents of this bill want to narrow the definition of the term Internet access to try to prohibit ISP’s from expanding services into other areas without being taxed. It is clear that the Congress is not going to let this ban lapse, and allow local and state govenments to start taxing Internet access. The Senate is very passionate about keeping the Internet as affordable and accessable to all Americans as possible.

However, the move to make the moratorium permanent failed three years ago, when you would have thought that it would have a had a better chance with Republicans in control of Congress. Democrats loathe the idea of the Internet becoming less affordable for the poor, but I think that the state governors will have the ear of quite a few members of Congress. Even though President Bush would love nothing more than to sign a permanent ban, I think Congress will probably extend the current law for four more years, and maybe tighten up the definition of the term Internet access.

Not surprisingly, my opinion is that no services provided on the Internet should be taxed, I don’t care if we are talking about audio, video, purchases, telephone services, and especially not access itself. The idea of the Internet as the last bastion of equal access and speech is already under attack, but I don’t want to think about what would happen if state taxes created entire parts of the country where people were priced out of getting on line. I would like nothing more than a permanent ban, but I’ll settle for a four year extension.

McCain press release 

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Jason Easley is the politics editor at www.411mania.com/politics His column The Political Universe appears on Tuesdays and Fridays.

Jason is also the host of TPU Radio, which can be heard at www.blogtalkradio.com/thepoliticaluniverse every Sunday morning at 11 AM ET.

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